diff --git a/beacon_node/beacon_chain/src/beacon_chain.rs b/beacon_node/beacon_chain/src/beacon_chain.rs
index c985f937a5..853b8def76 100644
--- a/beacon_node/beacon_chain/src/beacon_chain.rs
+++ b/beacon_node/beacon_chain/src/beacon_chain.rs
@@ -4832,7 +4832,7 @@ impl<T: BeaconChainTypes> BeaconChain<T> {
         let proposal_epoch = proposal_slot.epoch(T::EthSpec::slots_per_epoch());
         if head_state.current_epoch() == proposal_epoch {
             return get_expected_withdrawals(&unadvanced_state, &self.spec)
-                .map(|(withdrawals, _)| withdrawals)
+                .map(|(withdrawals, _, _)| withdrawals)
                 .map_err(Error::PrepareProposerFailed);
         }
 
@@ -4850,7 +4850,7 @@ impl<T: BeaconChainTypes> BeaconChain<T> {
             &self.spec,
         )?;
         get_expected_withdrawals(&advanced_state, &self.spec)
-            .map(|(withdrawals, _)| withdrawals)
+            .map(|(withdrawals, _, _)| withdrawals)
             .map_err(Error::PrepareProposerFailed)
     }
 
diff --git a/beacon_node/http_api/src/builder_states.rs b/beacon_node/http_api/src/builder_states.rs
index 7c05dd00d2..74228961fb 100644
--- a/beacon_node/http_api/src/builder_states.rs
+++ b/beacon_node/http_api/src/builder_states.rs
@@ -32,7 +32,7 @@ pub fn get_next_withdrawals<T: BeaconChainTypes>(
     }
 
     match get_expected_withdrawals(&state, &chain.spec) {
-        Ok((withdrawals, _)) => Ok(withdrawals),
+        Ok((withdrawals, _, _)) => Ok(withdrawals),
         Err(e) => Err(warp_utils::reject::custom_server_error(format!(
             "failed to get expected withdrawal: {:?}",
             e
diff --git a/consensus/state_processing/src/per_block_processing.rs b/consensus/state_processing/src/per_block_processing.rs
index 5335c917cb..7b16dbe804 100644
--- a/consensus/state_processing/src/per_block_processing.rs
+++ b/consensus/state_processing/src/per_block_processing.rs
@@ -30,6 +30,7 @@ pub mod deneb;
 pub mod errors;
 mod is_valid_indexed_attestation;
 pub mod process_operations;
+pub mod process_withdrawals;
 pub mod signature_sets;
 pub mod tests;
 mod verify_attestation;
@@ -39,7 +40,6 @@ mod verify_deposit;
 mod verify_exit;
 mod verify_proposer_slashing;
 
-use crate::common::decrease_balance;
 use crate::common::update_progressive_balances_cache::{
     initialize_progressive_balances_cache, update_progressive_balances_metrics,
 };
@@ -171,13 +171,20 @@ pub fn per_block_processing<E: EthSpec, Payload: AbstractExecPayload<E>>(
     // previous block.
     if is_execution_enabled(state, block.body()) {
         let body = block.body();
-        // TODO(EIP-7732): build out process_withdrawals variant for gloas
-        process_withdrawals::<E, Payload>(state, body.execution_payload()?, spec)?;
-        process_execution_payload::<E, Payload>(state, body, spec)?;
-    }
+        if state.fork_name_unchecked().gloas_enabled() {
+            process_withdrawals::gloas::process_withdrawals::<E>(state, spec)?;
 
-    // TODO(EIP-7732): build out process_execution_bid
-    // process_execution_bid(state, block, verify_signatures, spec)?;
+        // TODO(EIP-7732): build out process_execution_bid
+        // process_execution_bid(state, block, verify_signatures, spec)?;
+        } else {
+            process_withdrawals::capella::process_withdrawals::<E, Payload>(
+                state,
+                body.execution_payload()?,
+                spec,
+            )?;
+            process_execution_payload::<E, Payload>(state, body, spec)?;
+        }
+    }
 
     process_randao(state, block, verify_randao, ctxt, spec)?;
     process_eth1_data(state, block.body().eth1_data())?;
@@ -515,17 +522,70 @@ pub fn compute_timestamp_at_slot<E: EthSpec>(
 
 /// Compute the next batch of withdrawals which should be included in a block.
 ///
-/// https://github.com/ethereum/consensus-specs/blob/dev/specs/electra/beacon-chain.md#new-get_expected_withdrawals
+/// https://ethereum.github.io/consensus-specs/specs/gloas/beacon-chain/#modified-get_expected_withdrawals
+#[allow(clippy::type_complexity)]
 pub fn get_expected_withdrawals<E: EthSpec>(
     state: &BeaconState<E>,
     spec: &ChainSpec,
-) -> Result<(Withdrawals<E>, Option<usize>), BlockProcessingError> {
+) -> Result<(Withdrawals<E>, Option<usize>, Option<usize>), BlockProcessingError> {
     let epoch = state.current_epoch();
     let mut withdrawal_index = state.next_withdrawal_index()?;
     let mut validator_index = state.next_withdrawal_validator_index()?;
     let mut withdrawals = Vec::<Withdrawal>::with_capacity(E::max_withdrawals_per_payload());
     let fork_name = state.fork_name_unchecked();
 
+    // [New in Gloas:EIP7732]
+    // Sweep for builder payments
+    let processed_builder_withdrawals_count =
+        if let Ok(builder_pending_withdrawals) = state.builder_pending_withdrawals() {
+            let mut processed_builder_withdrawals_count = 0;
+            for withdrawal in builder_pending_withdrawals {
+                if withdrawal.withdrawable_epoch > epoch
+                    || withdrawals.len().safe_add(1)? == E::max_withdrawals_per_payload()
+                {
+                    break;
+                }
+
+                if process_withdrawals::is_builder_payment_withdrawable(state, withdrawal)? {
+                    let total_withdrawn = withdrawals
+                        .iter()
+                        .filter_map(|w| {
+                            (w.validator_index == withdrawal.builder_index).then_some(w.amount)
+                        })
+                        .safe_sum()?;
+                    let balance = state
+                        .get_balance(withdrawal.builder_index as usize)?
+                        .safe_sub(total_withdrawn)?;
+                    let builder = state.get_validator(withdrawal.builder_index as usize)?;
+
+                    let withdrawable_balance = if builder.slashed {
+                        std::cmp::min(balance, withdrawal.amount)
+                    } else if balance > spec.min_activation_balance {
+                        std::cmp::min(
+                            balance.safe_sub(spec.min_activation_balance)?,
+                            withdrawal.amount,
+                        )
+                    } else {
+                        0
+                    };
+
+                    if withdrawable_balance > 0 {
+                        withdrawals.push(Withdrawal {
+                            index: withdrawal_index,
+                            validator_index: withdrawal.builder_index,
+                            address: withdrawal.fee_recipient,
+                            amount: withdrawable_balance,
+                        });
+                        withdrawal_index.safe_add_assign(1)?;
+                    }
+                }
+                processed_builder_withdrawals_count.safe_add_assign(1)?;
+            }
+            Some(processed_builder_withdrawals_count)
+        } else {
+            None
+        };
+
     // [New in Electra:EIP7251]
     // Consume pending partial withdrawals
     let processed_partial_withdrawals_count =
@@ -626,71 +686,9 @@ pub fn get_expected_withdrawals<E: EthSpec>(
             .safe_rem(state.validators().len() as u64)?;
     }
 
-    Ok((withdrawals.into(), processed_partial_withdrawals_count))
-}
-
-/// Apply withdrawals to the state.
-/// TODO(EIP-7732): abstract this out and create gloas variant
-pub fn process_withdrawals<E: EthSpec, Payload: AbstractExecPayload<E>>(
-    state: &mut BeaconState<E>,
-    payload: Payload::Ref<'_>,
-    spec: &ChainSpec,
-) -> Result<(), BlockProcessingError> {
-    if state.fork_name_unchecked().capella_enabled() {
-        let (expected_withdrawals, processed_partial_withdrawals_count) =
-            get_expected_withdrawals(state, spec)?;
-        let expected_root = expected_withdrawals.tree_hash_root();
-        let withdrawals_root = payload.withdrawals_root()?;
-
-        if expected_root != withdrawals_root {
-            return Err(BlockProcessingError::WithdrawalsRootMismatch {
-                expected: expected_root,
-                found: withdrawals_root,
-            });
-        }
-
-        for withdrawal in expected_withdrawals.iter() {
-            decrease_balance(
-                state,
-                withdrawal.validator_index as usize,
-                withdrawal.amount,
-            )?;
-        }
-
-        // Update pending partial withdrawals [New in Electra:EIP7251]
-        if let Some(processed_partial_withdrawals_count) = processed_partial_withdrawals_count {
-            state
-                .pending_partial_withdrawals_mut()?
-                .pop_front(processed_partial_withdrawals_count)?;
-        }
-
-        // Update the next withdrawal index if this block contained withdrawals
-        if let Some(latest_withdrawal) = expected_withdrawals.last() {
-            *state.next_withdrawal_index_mut()? = latest_withdrawal.index.safe_add(1)?;
-
-            // Update the next validator index to start the next withdrawal sweep
-            if expected_withdrawals.len() == E::max_withdrawals_per_payload() {
-                // Next sweep starts after the latest withdrawal's validator index
-                let next_validator_index = latest_withdrawal
-                    .validator_index
-                    .safe_add(1)?
-                    .safe_rem(state.validators().len() as u64)?;
-                *state.next_withdrawal_validator_index_mut()? = next_validator_index;
-            }
-        }
-
-        // Advance sweep by the max length of the sweep if there was not a full set of withdrawals
-        if expected_withdrawals.len() != E::max_withdrawals_per_payload() {
-            let next_validator_index = state
-                .next_withdrawal_validator_index()?
-                .safe_add(spec.max_validators_per_withdrawals_sweep)?
-                .safe_rem(state.validators().len() as u64)?;
-            *state.next_withdrawal_validator_index_mut()? = next_validator_index;
-        }
-
-        Ok(())
-    } else {
-        // these shouldn't even be encountered but they're here for completeness
-        Ok(())
-    }
+    Ok((
+        withdrawals.into(),
+        processed_builder_withdrawals_count,
+        processed_partial_withdrawals_count,
+    ))
 }
diff --git a/consensus/state_processing/src/per_block_processing/process_withdrawals.rs b/consensus/state_processing/src/per_block_processing/process_withdrawals.rs
new file mode 100644
index 0000000000..4082403dc1
--- /dev/null
+++ b/consensus/state_processing/src/per_block_processing/process_withdrawals.rs
@@ -0,0 +1,166 @@
+use super::errors::BlockProcessingError;
+use super::get_expected_withdrawals;
+use crate::common::decrease_balance;
+use safe_arith::SafeArith;
+use tree_hash::TreeHash;
+use types::{
+    AbstractExecPayload, BeaconState, BuilderPendingWithdrawal, ChainSpec, EthSpec, ExecPayload,
+    List, Withdrawals,
+};
+
+/// Check if a builder payment is withdrawable.
+/// A builder payment is withdrawable if the builder is not slashed or
+/// the builder's withdrawable epoch has been reached.
+pub fn is_builder_payment_withdrawable<E: EthSpec>(
+    state: &BeaconState<E>,
+    withdrawal: &BuilderPendingWithdrawal,
+) -> Result<bool, BlockProcessingError> {
+    let builder = state.get_validator(withdrawal.builder_index as usize)?;
+    let current_epoch = state.current_epoch();
+
+    Ok(builder.withdrawable_epoch >= current_epoch || !builder.slashed)
+}
+
+fn process_withdrawals_common<E: EthSpec>(
+    state: &mut BeaconState<E>,
+    expected_withdrawals: Withdrawals<E>,
+    partial_withdrawals_count: Option<usize>,
+    spec: &ChainSpec,
+) -> Result<(), BlockProcessingError> {
+    match state {
+        BeaconState::Capella(_)
+        | BeaconState::Deneb(_)
+        | BeaconState::Electra(_)
+        | BeaconState::Fulu(_)
+        | BeaconState::Gloas(_) => {
+            // Update pending partial withdrawals [New in Electra:EIP7251]
+            if let Some(partial_withdrawals_count) = partial_withdrawals_count {
+                state
+                    .pending_partial_withdrawals_mut()?
+                    .pop_front(partial_withdrawals_count)?;
+            }
+
+            // Update the next withdrawal index if this block contained withdrawals
+            if let Some(latest_withdrawal) = expected_withdrawals.last() {
+                *state.next_withdrawal_index_mut()? = latest_withdrawal.index.safe_add(1)?;
+
+                // Update the next validator index to start the next withdrawal sweep
+                if expected_withdrawals.len() == E::max_withdrawals_per_payload() {
+                    // Next sweep starts after the latest withdrawal's validator index
+                    let next_validator_index = latest_withdrawal
+                        .validator_index
+                        .safe_add(1)?
+                        .safe_rem(state.validators().len() as u64)?;
+                    *state.next_withdrawal_validator_index_mut()? = next_validator_index;
+                }
+            }
+
+            // Advance sweep by the max length of the sweep if there was not a full set of withdrawals
+            if expected_withdrawals.len() != E::max_withdrawals_per_payload() {
+                let next_validator_index = state
+                    .next_withdrawal_validator_index()?
+                    .safe_add(spec.max_validators_per_withdrawals_sweep)?
+                    .safe_rem(state.validators().len() as u64)?;
+                *state.next_withdrawal_validator_index_mut()? = next_validator_index;
+            }
+
+            Ok(())
+        }
+        // these shouldn't even be encountered but they're here for completeness
+        BeaconState::Base(_) | BeaconState::Altair(_) | BeaconState::Bellatrix(_) => Ok(()),
+    }
+}
+
+pub mod capella {
+    use super::*;
+    /// Apply withdrawals to the state.
+    pub fn process_withdrawals<E: EthSpec, Payload: AbstractExecPayload<E>>(
+        state: &mut BeaconState<E>,
+        payload: Payload::Ref<'_>,
+        spec: &ChainSpec,
+    ) -> Result<(), BlockProcessingError> {
+        // check if capella enabled because this function will run on the merge block where the fork is technically still Bellatrix
+        if state.fork_name_unchecked().capella_enabled() {
+            let (expected_withdrawals, _, partial_withdrawals_count) =
+                get_expected_withdrawals(state, spec)?;
+
+            let expected_root = expected_withdrawals.tree_hash_root();
+            let withdrawals_root = payload.withdrawals_root()?;
+            if expected_root != withdrawals_root {
+                return Err(BlockProcessingError::WithdrawalsRootMismatch {
+                    expected: expected_root,
+                    found: withdrawals_root,
+                });
+            }
+
+            for withdrawal in expected_withdrawals.iter() {
+                decrease_balance(
+                    state,
+                    withdrawal.validator_index as usize,
+                    withdrawal.amount,
+                )?;
+            }
+
+            process_withdrawals_common(state, expected_withdrawals, partial_withdrawals_count, spec)
+        } else {
+            // these shouldn't even be encountered but they're here for completeness
+            Ok(())
+        }
+    }
+}
+pub mod gloas {
+    use super::*;
+
+    // TODO(EIP-7732): Add comprehensive tests for Gloas `process_withdrawals`:
+    // Similar to Capella version, these will be tested via:
+    // 1. EF consensus-spec tests in `testing/ef_tests/src/cases/operations.rs`
+    // 2. Integration tests via full block processing
+    // These tests would currently fail due to incomplete Gloas block structure as mentioned here, so we will implement them after block and payload processing is in a good state.
+    // https://github.com/sigp/lighthouse/pull/8273
+    /// Apply withdrawals to the state.
+    pub fn process_withdrawals<E: EthSpec>(
+        state: &mut BeaconState<E>,
+        spec: &ChainSpec,
+    ) -> Result<(), BlockProcessingError> {
+        if !state.is_parent_block_full() {
+            return Ok(());
+        }
+
+        let (expected_withdrawals, builder_withdrawals_count, partial_withdrawals_count) =
+            get_expected_withdrawals(state, spec)?;
+
+        *state.latest_withdrawals_root_mut()? = expected_withdrawals.tree_hash_root();
+
+        for withdrawal in expected_withdrawals.iter() {
+            decrease_balance(
+                state,
+                withdrawal.validator_index as usize,
+                withdrawal.amount,
+            )?;
+        }
+
+        if let (Ok(builder_pending_withdrawals), Some(builder_count)) = (
+            state.builder_pending_withdrawals(),
+            builder_withdrawals_count,
+        ) {
+            let mut updated_builder_withdrawals =
+                Vec::with_capacity(E::builder_pending_withdrawals_limit());
+
+            for (i, withdrawal) in builder_pending_withdrawals.iter().enumerate() {
+                if i < builder_count {
+                    if !is_builder_payment_withdrawable(state, withdrawal)? {
+                        updated_builder_withdrawals.push(withdrawal.clone());
+                    }
+                } else {
+                    updated_builder_withdrawals.push(withdrawal.clone());
+                }
+            }
+
+            *state.builder_pending_withdrawals_mut()? = List::new(updated_builder_withdrawals)?;
+        }
+
+        process_withdrawals_common(state, expected_withdrawals, partial_withdrawals_count, spec)?;
+
+        Ok(())
+    }
+}
diff --git a/consensus/types/src/beacon_state.rs b/consensus/types/src/beacon_state.rs
index 4db17aea5c..4aaf899844 100644
--- a/consensus/types/src/beacon_state.rs
+++ b/consensus/types/src/beacon_state.rs
@@ -2204,6 +2204,7 @@ impl<E: EthSpec> BeaconState<E> {
         }
     }
 
+    /// Return true if the parent block was full (both beacon block and execution payload were present).
     pub fn is_parent_block_full(&self) -> bool {
         match self {
             BeaconState::Base(_) | BeaconState::Altair(_) => false,
diff --git a/testing/ef_tests/src/cases/operations.rs b/testing/ef_tests/src/cases/operations.rs
index a53bce927c..63b46945c2 100644
--- a/testing/ef_tests/src/cases/operations.rs
+++ b/testing/ef_tests/src/cases/operations.rs
@@ -419,8 +419,15 @@ impl<E: EthSpec> Operation<E> for WithdrawalsPayload<E> {
         spec: &ChainSpec,
         _: &Operations<E, Self>,
     ) -> Result<(), BlockProcessingError> {
-        // TODO(EIP-7732): implement separate gloas and non-gloas variants of process_withdrawals
-        process_withdrawals::<_, FullPayload<_>>(state, self.payload.to_ref(), spec)
+        if state.fork_name_unchecked().gloas_enabled() {
+            process_withdrawals::gloas::process_withdrawals(state, spec)
+        } else {
+            process_withdrawals::capella::process_withdrawals::<_, FullPayload<_>>(
+                state,
+                self.payload.to_ref(),
+                spec,
+            )
+        }
     }
 }